By: Andrew T. Gardener, CFP® and Matthew Berti, CFP®, CPWA®
Congratulations, graduate! In the movies, graduation means rows and rows of white folding chairs on a green quad and young men and women dressed in caps and gowns listening to speeches about their bright futures and how the world is their oyster. After the speeches end and the mortarboards are stashed away, reality sets in: Oysters are expensive.
The best way to prepare for life after graduation is to begin to plan before you graduate. To establish a strong financial footing, you’ll need to answer a couple of key questions:
- Where will I live?
- How will I pay for my lifestyle?
PREPARING YOUR LIVING ARRANGEMENTS
Because the cost of rent is so high, most graduates will have two options: Live with their parents or relatives or find roommates to share the cost of an apartment. The first is easy and will allow you to save more money, but it may come with strings attached. After all, it’s their house and their rules!
If you have friends or know others in a similar circumstance, renting and living together may be fun. Before renting, be sure to look at all the expenses over and above the stated rent cost, such as:
- Security deposit
- Renters insurance
- Furniture rental or purchase
- Kitchen utensils, pots, pans, and plates
- Monthly cable/internet fees
By evaluating extra expenses on top of rent, you will be able to prepare and budget accordingly.
FINDING A JOB
As you embark on your next chapter, you’ll need to pay for your new lifestyle. That means securing a job, ideally before you graduate.
Here are six tips to help you find that first full-time job:
- Speak with your college counselors or career center about assistance with writing and refining your resume and cover letter. Having a polished and professional resume are important.
- Attend college career fairs to meet employers, network for opportunities and meet alumni who may be able to help you land your first post-graduation position.
- Use job search websites such as Indeed or Monster to see what is available in your field or desired living area.
- Reach out to recruiters through LinkedIn or their company websites about working with them.
- See if there are any professional or credentialing organizations in your field that have their own online job board. For example, the CFP Board Career Center focuses on jobs related to financial planning, including client support and administrative roles.
- Reach out to family, friends, and classmates to see if they know of any companies hiring or know someone in your desired field that may be able to connect you with the right people.
CREATING A SPENDING AND SAVING PLAN
You want to avoid being a part of the 38% of Americans who spend everything they make or the 18% who spend more than they make. Financial success starts with spending less than you make and having a budget that you stick to. Before you commit to a lease or a new job, you will want to examine what your desired lifestyle will cost to determine if it is realistic. Within your budget, make sure to include household expenses, food, entertainment, transportation, insurance, phone, and debt repayment.
The best way to spend within your means is to create a spending and saving plan. Working with a CERTIFIED FINANCIAL PLANNER™ professional can help you create and monitor your plan. There are also online services that can help you track expenses by category.
SAVING TODAY FOR TOMORROW
Anyone graduating from college now has a right to be skeptical about what Social Security benefits may be available when they are ready to retire. That means you will be responsible for providing for your own retirement one day. The sooner you begin to save, the better. A CFP® professional can help you review and determine the best retirement savings options available to you. This article by Andrew and Matt was previously seen in LetsMakeAPlan.org. Embrace and prepare for your future. After all, the world is your oyster.
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